Home & Leisure



Real Estate Matters: Fees vary buying a home with cash versus using a lender

By Ilyce Glink and Samuel J. Tamkin, Tribune Content Agency on

Q: Thanks for your recent article titled "Is it better to buy for cash or take out a mortgage." You imply, if not suggest, that if you pay cash, you don't need to incur the expenses associated with title insurance and "other title company closing fees and charges." Why is that?

A: Well, we didn't mean to imply that buying with cash would mean that you would save on non-mortgage expenses. There are still plenty of those; but when you buy a home with a lender, you have your usual home buying expenses plus all those expenses that go along with having a lender and securing financing.

Let's say you buy a home for cash and without a lender. In this situation, as a buyer, you'll pay for the usual closing costs charged to the buyer, including (but not limited to) the cost of a survey, owner's title insurance, buyer charged transfer taxes, recording fees, all or part of the closing or settlement fees (depending on the custom in any given area). You also have fees for an inspector, termite, radon, septic tank and water inspection fees.

These days, if you're buying a condominium, you may also have fees you pay as a buyer to the condominium association to transfer or set up a new account, along with move-in deposits and move-in fees.

There is a plethora of fees when it comes to buying residential real estate, but the focus of our last column you mentioned was on the fees charged by lenders. So, if you have cash on hand and are looking to determine whether a loan is right for you, you have to figure out what it will cost you to take out that loan. For some home buyers that have the cash on hand, the costs of taking out a mortgage may outweigh the benefits.


Ilyce has a list of costs associated with the home buying process on ThinkGlink.com under the article name "Buying a Home: Estimated Closing Costs." We go into more detail about the amounts of these closing costs, explaining what they are and how much you can expect to pay. Thanks for your question.


(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)



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